Late-Qing Merchants and Guilds: 1840 to 1911

During the late-Qing period—reaching from the mid-nineteenth century to the fall of the Qing empire in 1911—the place of merchants evolved. Foreign military incursion and domestic rebellion weakened Qing authority, and at the same time the authority of merchants and their organizations increased. Despite the burgeoning merchant power, however, the government continued to try to supervise business in order to harness industrialization and strengthen the state. These trends put a new, more modern face on the merchant-state relationship. Yet the traditional dualism, as seen in the state's regulation of business, the social blending of merchant and official classes, and the separate existence of the gong realm, remained basically intact.

Defeat upon defeat by foreign militaries over the Qing army paved the way for a growing foreign economic presence in China's Treaty Ports. In the Treaty Ports, foreign traders for the first time were free to carry on transactions with whomever they pleased. This development in turn created a new segment of merchants: the comprador bourgeoisie (maiban zibenjia ).^[13] Compradors who began as clerks and purveyors under the earlier Cohong (gonghang ) system became guarantors for business transactions between their new foreign employers and Chinese businesses. Increased foreign trade presented the opportunity for compradors to trade exclusively for their own accounts, and as a result many amassed substantial private wealth.^[14] . Compradors and other prominent Chinese merchants also introduced a distinctive lifestyle into urban

[13] A "comprador" (literally "purchaser" in Portuguese) was head of a foreign firm's Chinese staff, and performed a multitude of functions: house steward, business assistant, salesman, treasurer, interpreter, freight broker, and intelligence provider. Members of this class came primarily from the coastal regions of Ningbo, Shanghai, Jiangsu, Zhejiang, and Guangdong. See Bergère (1989), pp. 38-40; Wellington Chan (1977), pp. 43-44, 236; and Hao (1970), ch. 4. Classic works on the Treaty Ports include Feuerwerker (1976) and Murphy (1970).

[14] During the early- and middle-Qing periods, Chinese merchants who handled trade with foreigners had been organized into the "merchant guild of Cohong" that was centered in Guangdong. The guild was "licensed by and responsible to the officials, and had a monopoly over all trade with Western merchants" (Hao [1970], p. 2). Bergère (1989) notes that compradors made money not only from their high salaries and business investments, but also from commissions from their foreign employers, interest from their Chinese clientele, and other benefits that accrued from their position.

coastal China. Whereas, previously, merchants had been anxious to blend into the traditional gentry mold, they became more confident in asserting a more cosmopolitan lifestyle. For example, compradors in Shanghai generally preferred, for reasons of convenience, comfort, and prestige, to live in the International Settlement. They chose Western-style houses and clothing (exchanging their blue, floor-length, silk gowns for jackets and suits). Often, they spoke in pidgin English and converted to Christianity or Catholicism (depending upon the religion of their foreign employers).^[15]

Business guilds also became more prominent in the late Qing, and they became politically engaged. The decline of Qing authority led them increasingly to participate in the keeping of social order and in major gong works, and at certain times (such as during the 1850s Taiping Rebellion) guilds assumed the powers of municipal government. They resisted efforts by city and provincial governments following the Taiping Rebellion to take over functions that by custom had been the prerogative of guilds. New guilds were founded to resist local officials' demands for payments.^[16] During the waning years of Qing rule, merchants also increased their contacts with members of Sun Yat-sen's Revolutionary Alliance (Tongmenghui), and after the 1911 revolution, many merchants, including many compradors, participated in the new but short-lived municipal governments. The nationalism of the business elite was also aroused, though not to the degree of the later May Fourth era. Still, many merchants, including some increasingly nationalistic compradors, protested against the foreign presence in China, particularly (after 1905) the Qing court's heavy reliance on foreign development of railways.^[17]

[15] Bergère (1989), pp. 46-51 Bergère argues that the fact that compradors and other members of the business elite were anxious for "modernity"—and that "modernity" was equated with Westernization—is responsible for much of this transformation. Still, she notes that their assimilation of things Western was accompanied by nationalism, leading to a "hybrid culture." The size of the comprador class grew from a few hundred in the mid-nineteenth century to 20,000 by the beginning of the twentieth (see Bergère, pp. 39-40).

[16] On the evolving role of guilds in the late Qing, see Wellington Chan (1977), p. 215; Elvin (1973), pp. 292-293; Fewsmith (1985), ch. 1; Mann (1987), pp. 12-21; and Rowe (1984), pp. 285-286. Guilds also continued to attend to the "three great concerns" (san da shi ) of travelers: food, funerals, and sacrificial rites.

[17] The Railway Rights Recovery Movement (1906-1909) created privately run provincial railway companies in Guangdong, Zhejiang, and Jiangsu provinces. See Liao (1984), pp. 128-146, 240. The United States government's Exclusion Act forbidding Chinese laborers from entering the country was another trigger for anti-foreign protests and boycotts. On the politicization of merchants during this period, see also Fewsmith (1985), pp. 40-45; and Bergère (1989), pp. 48-51.

The decline in Qing strength and the concomitant rise of merchant authority forced government reformers in the late nineteenth century to reappraise China's economic strategy and the role of merchants in it.^[18] If China were to industrialize, they reasoned, the country would need to engage the participation of industrialists and other commercial experts. A 1903 imperial edict proclaimed it time to eradicate the attitude of superiority toward merchants and the accumulation of wealth. The anti-merchant tendency was challenged and effectively (if temporarily) eroded. The lifting of restrictions on the participation of scholar-officials in commerce and industry in the second half of the nineteenth century further legitimated the merchant role. In a pattern strikingly prescient of the post-Mao era, some officials-turned-industrialists even relinquished their government posts and created successful businesses using ties to their former colleagues, while merchants were encouraged to participate more in official projects. By 1903, the newly established Ministry of Commerce had announced it would grant titles and ranks to merchants to reward capital investments in modern enterprises. These changes continued to blur the social distinction between literati and merchant ranks. By the early 1900s, a local leadership class of "gentry-merchants" (shenshang ) had emerged.

The view among reformers of that period that China required modern industry (in part to ward off foreign military and economic competition) was accompanied by an agreement that industrialization should strengthen the nation and occur within the framework of state supervision. There was considerable difficulty, however, resolving exactly what form that supervision should take. Late-nineteenth-century proposals for "government supervision and merchant management" (guandu shangban ) and "official-merchant joint management" (guan-shang heban ) both emphasized state control and did not produce successful industries. The officials-turned-entrepreneurs who emerged in the early

[18] Reform efforts began in the conservative Tongzhi Restoration (1862-1874), and at first were limited to borrowing foreign military technology. The scope of reform gradually came to include innovation in other core industries (such as textiles and shipping) and to emphasize industry and commerce as crucial sectors. The newly proclaimed attitudes nonetheless distinguished among merchants; smaller merchants involved in domestic commerce were still held in disrepute, while industrial entrepreneurs and international traders gained respect. See Wellington Chan (1977), pp. 25-57, 239.

1900s occasionally were able to gain the confidence of private investors, as well as to institute a "merchant management" (shangban ) system that was comparatively free of direct bureaucratic supervision but retained official links, used state funds, and received political protection. Some connection with the state remained the norm.^[19] In conjunction with the continued state supervision, and even as modernization and industrialization became watchwords of the day, clientelism and personalistic or native-place networks remained salient. As the son of one prominent official-turned-industrialist commented, "In Chinese society, you cannot accomplish anything without having close ties with officials. They can help you or break you."^[20]

If the effort to carve out a new role for officials in supervising the economy was not particularly satisfactory, an innovative proposal for using merchant organizations in initiatives to strengthen the state proved more successful. Arguing that members of the local elite, including merchants, possessed expertise that could unleash China's commercial power, reformers proposed that the government create new commercial associations that would both prevent bureaucratic meddling in commerce and promote the trickling up of ideas from merchants to the state. They pointed to the powerful foreign chambers of commerce in the Treaty Ports as models of strength and unity within the business community. A newly formed Ministry of Commerce, supported by a 1904 imperial decree, directed that chambers of commerce (shangwu hui , or shangyi ) be set up in all provincial capitals and major commercial cities, with branches in smaller commercial areas. By 1908 there were chambers in thirty-one major cities.^[21] Like merchants and their guilds, these new chambers possessed a dual character. On the one hand, the reformers in the central government had a strong influence in the setting up of these chambers and clearly intended to put them to their

[19] Wellington Chan (1977), pp. 237-241. Most post-1949 Chinese (and Western) scholarship on this era has been critical of its enterprise managers because they came from bureaucracy or government rather than private business, and lacked technological, managerial, and financial skills. Recently, however, historians inside and outside China have come to see more positive features in the earlier period. See Tim Wright (1988); Cochran (1980). It should be noted that a struggle between the central and provincial governments complicated the search for an effective form of state supervision, as the desire of the center to wrest control of industry from provincial governments underlay efforts in the first decade of the twentieth century to set up ministries at the center.

[20] Wellington Chan (1977), p. 57.

[21] See Wellington Chan (1977), pp. 32-33, 216-234; Fewsmith (1985), pp. 25-36.

own purposes; the new bodies were created under rules dictated by the government, usually by co-opting existing groups. The functions of these new bodies, also defined by the ministry, were to improve commercial matters, conduct surveys and channel information to the ministry, sponsor exhibitions, run training programs, notify the ministry of undue interference by local authorities, and pass merchant opinions to the local and central government authorities.^[22] On the other hand, once legitimated, these organizations strove for greater independence. Particularly in Shanghai and Canton, the government was forced to allow some autonomy to the chambers in return for their cooperation in promoting modernization.^[23] The Shanghai General Chamber of Commerce (SGCC) soon after its founding became active in the nation's political life, as exemplified by its effort to participate in the writing of the constitution promised by the Qing court in 1906. The SGCC, in conjunction with gentry representatives, organized an association devoted to constitutionalism, lobbied for procedural changes in the constitutional process, and participated in drafting provincial assembly regulations.^[24] These political moves presaged the short-lived and yet remarkable activity of this and other chambers after the collapse of the Qing government.

During the late Qing, then, industrialization and the foreign threat generated a more sophisticated role for merchants and the creation of new institutions to guide industrialization. Even so, the essence of the old dual pattern—state supervision coupled with limited merchant autonomy, the social blending of official and merchant groups, and the existence of a "public" realm—remained.